Seventy-one percent of managed service providers (MSPs) currently offer one or more forms of email hosting and another 14% are planning to do so, according to research from Techaisle, a small and medium-sized business (SMB) and channel market research firm. However, many MSPs do not have their own data centers to host email, which requires them to invest in infrastructure.

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"This necessary investment has led to a 'chain-effect' of channel partners that do not own infrastructure, but rent [the infrastructure] from other service providers,'' Anurag Agrawal, CEO and analyst at Techaisle, noted.

That's what Total Technology Solutions (TTS) is doing by partnering with Rackspace, AppRiver and GoDaddy in order to offer email migration (from one host or server to another), setup, maintenance and backup, according to Bob Swensen, president and CEO. That way, "We don't have any infrastructure we have had to invest in. Outsourcing these things is more cost-effective than doing it ourselves,'' he explained.

The company's clients range from organizations with two email accounts to those with up to 100 to 200 users, Swensen said. The firm provides hosted Exchange and hosted POP on Windows-based servers, as well as hosted email filtering, spam filtering, message archiving and email continuity, he said.

Microcomputer Consulting Group (MCG) has also partnered with Rackspace and offers clients hosted POP email as well as hosted Exchange, said Kenneth Goldberg, president of the New York City-based company. Like TTS, MCG services SMBs. About three to four years ago, the idea of hosting Exchange outside of a customer's walls was "becoming more comfortable, and the price point had dropped sufficiently enough that we started to look at what [we could] do." MCG had reached a tipping point, given that both the company and its customers would need to keep doing periodic Exchange server hardware and software refreshes, said Goldberg.

On top of that, Hurricane Sandy affected several businesses in New York City, and "anyone operating Exchange in-house had no email or communications," including MCG, he recalled.

That prompted MCG to partner with Rackspace. Today, he said, the company has converted 85% of its customers from an internal Exchange environment to hosted Exchange.

The challenges of managed email

MCG and TTS have joined a multitude of other companies in the managed email space. Indeed, the market is saturated with MSPs that offer managed email, but as with most services, the not-so-secret sauce is the ability to differentiate themselves.

Seventy-one percent of MSPs currently offer one or more forms of email hosting and another 14% are planning to do so, according to Techaisle.

Their value-add here "is the ability to wrap security solutions around email delivery to their customers, especially, as part of a bundled mobility solution,'' Agrawal said.

"We have a set of standards with regard to password protection and Rackspace enforces that, but we encourage people to change their passwords constantly,'' said Goldberg.

Spam filters come with the Rackspace platform, but MCG still counsels users on the type of emails not to open. The benefit of partnering with providers like Rackspace is the level of sophistication and security protection users can get versus what they would have internally, he said.

SMB customers "would have firewalls and antivirus [software], but those are almost children's toys compared to what organizations like Rackspace or Microsoft need to put in place to make sure your email is protected,'' Goldberg said. "The truth is your information is probably more protected than if you were to manage it yourself."

Additional challenges

TTS, meanwhile, helps its customers meet their regulatory compliance obligations. Because TTS works with a lot of companies in the financial and healthcare sectors, which are heavily regulated, there are many challenges to providing hosted email, Swensen said.

"Sometimes, [the challenge] is the cost. Hosted Exchange is more expensive than other solutions, but some clients require this kind of email" because of their compliance needs, Swensen noted. "The requirement includes maintaining copies of all electronic communications for a period of seven or 10 years.''

Additionally, he said it can be difficult to migrate some clients from an older, internal system to a newer, hosted system.

"If clients have large email boxes, that can cause issues when migrating or just using Outlook as an email client,'' Swensen said. "Sometimes just getting a client to make any change can be difficult."

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